Technology and Innovation Report 2015

Fostering Innovation Policies for Industrial Development

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This report focuses on how innovation policies can expressly promote industrial development, and what lessons can be learnt from existing experiences of countries, both developing and developed. It argues that while technology and innovation are an essential component of how industries use knowledge to apply to learning, their role in fostering economic development can only be harnessed if innovation policies are clearly and coherently linked to overall industrial development goals of countries. Basing its analysis on data as well as experiences of countries, the report argues for closer coordination between innovation policies and industrial goals in order to promote technology and innovation for overall economic development.



Promoting innovation policies for industrial development in Ethiopia

Ethiopia’s Growth and Transformation Plan (GTP) of 2010-2015 (hereafter referred to as GTP I) is an ambitious policy document aimed at creating an enabling business environment and nurturing the growth of the country’s industrial sector (MoFED Ethiopia, 2010). These goals are a follow-up of Ethiopia’s developmental plans over the past two decades, where the country has heavily invested in infrastructural development, expansion of exports and increased expenditure to enhance pro-poor growth (AfDB, 2010). In order to ensure continuity, the GTP I envisages a range of policy measures and incentives, including tax holidays, duty-free capital goods imports and the creation of industrial cluster zones. It also sets out several targets for productivity growth, capacity utilization in industry and exports earnings across various sectors, and seeks to link economic growth with poverty reduction and other development targets. Ethiopia was expected to invest over $75 billion to implement GTP I, which it hoped would achieve double digit (11-15  per cent) annual GDP growth between 2010 and 2015 (MoFED Ethiopia, 2010).


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